20160819Comments.pdf

KARL T. KLEIN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 5156
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
r •• !\"' ·19 p~··1 1·~9 r~, I•! ~, ,I ' ,. • V l L:; !j f ,'>.)~) '
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
MORNING VIEW WATER COMPANY FOR )
AUTHORITY TO INCREASE ITS RATES AND )
CHARGES FOR WATER SERVICE IN IDAHO )
)
)
---------~-------)
CASE NO. MNV-W-16-01
COMMENTS OF THE
COMMISSION STAFF
The Staff of the Idaho Public Utilities Commission comments as follows on Morning
View Water Company's Application.
BACKGROUND
On May 2, 2016, Morning View Water Company ("Morning View" or "Company") filed
an Application with the Commission to increase its rates and charges for water service. The
Company subsequently amended its Application on May 16, 2016 and July 12, 2016.
In its Application, the Company asked the Commission to approve a 100% rate increase
for customers who live on one acre and half acre lots, and a 50% increase for customers with
quarter acre lots. The Company seeks to implement the following monthly flat rates for water
service: $98.96/month-customers with one acre lots; $81.88/month -customers with half acre
lots; and $48.61/month-customers with quarter acre lots. The Company's current rates were
established September 1, 2007. The Company asked that the new rates take effect on June 1,
STAFF COMMENTS 1 AUGUST 19, 2016
2016. The Commission has suspended that proposed effective date for 30 days and 5 months
under Idaho Code§ 61-622(4). See Order No. 33531.
STAFF REVIEW
Summary
Staff recommends a total revenue requirement of $91,061. This is a revenue increase of
$38,843 above test year revenue of $52,219, which is a 74% increase. Staff also recommends a
total expense allowance of$78,150 and rate base of$465,874; consisting of$469,916 in plant in
service, $10,411 in accumulated depreciation, and $6,369 in working capital.
Background and System Description
Morning View serves about 106 residential customers in the Morning View Acres
Subdivision (Divisions 1, 2, 3, and 4) and Country Grove Estates Mobile Home Subdivision
(Division 1) in or around Rigby, Idaho.
The Company expects to add up to twenty new customers to the system over the next
three to five years. The system should be able to accommodate growth; however, adding new
customers may affect the Company's financial condition and rate design in future proceedings.
In 2007 and 2010, the Idaho Department of Environmental Quality (DEQ) entered a
Consent Order that found the Company had violated the Idaho Rules for Public Water Systems,
IDAPA 58.01.08, and required the Company to make certain improvements to its water system.
The Company obtained a loan from the State of Idaho's Drinking Water Treatment Facility Loan
Account to fund the required system improvements, including a new well, well house, meters, and
variable frequency drive pumps. In 2015, the DEQ reapproved the drinking water system after
finding the Company had completed the required improvements and otherwise satisfied the
DEQ's conditions.
Customer comments in this proceeding have referenced water pressure problems. Staff
has determined that these problems have been substantially resolved, and that most of them
occurred at least a year ago before the Company had improved the system as described above.
Additionally, some pressure problems may have been related to excessive use by a customer (or
customers) on the system, including at least one customer's unauthorized installation of an
auxiliary pump to increase water flow to his property. Staff understands the customer has
STAFF COMMENTS 2 AUGUST 19, 2016
discontinued the unauthorized pumping. Any remaining pressure problems seem relatively
localized and minor, as typically found in a normally operating radial water distribution system
like the one operated by the Company.
Related Party Transactions and Internal Controls
Morning View is a family owned and operated water company. The Company's owners
also are involved in other business ventures, and some of these affiliated parties do business with
the Company. Staff closely scrutinized all affiliated-party transactions to verify their
reasonableness.
As part of its audit, Staff reviewed whether the Company has adequate internal controls to
ensure its accounting system and financial reporting are accurate and reliable. In previous audits,
Staff found some accounting records were poorly kept or unavailable. Staff was informed these
accounting records were maintained on a laptop computer the Company did not own or control,
and this lack of internal controls resulted in the loss of accounting records. Thus, a new computer
and accounting system were needed.
The Company has since adopted the QuickBooks accounting program and engaged Mr.
David Reading as the bookkeeper. Mr. Reading has an Associate' s degree in Accounting, has
training in relevant computer applications, and his responses to Staffs requests for documents in
this case demonstrate he understands bookkeeping processes. Staff commends the Company for
making these changes to improve its accounting system. However, adopting the new account
structure and hiring a bookkeeper are preliminary steps towards establishing adequate internal
controls over accounting and reporting.
A company with proper internal controls requires adequate separation of duties, and
separates its employees' duties to create a built-in system of checks and balances that ensures one
person is not responsible for an entire section of work. Mr. Reading significantly or wholly
controls all of the Company's accounting processes, including revenues; payments; all accounting
entries; all supporting documents, reconciliations and reports; recording all transactions; check
signing authority and is the custodian of bank reconciliations. Additionally, all Company
accounting entries are on a computer owned by Mr. Reading. Staff does not, therefore, believe
there are sufficient separation of duties to ensure the Company has adequate internal controls over
its accounting and finances.
STAFF COMMENTS 3 AUGUST 19, 2016
Staff acknowledges the Company only has three employees and that it may thus be
difficult for the Company to adequately separate its employees' duties. But Staff believes it is
possible. To help achieve adequate controls, Staff recommends the Company adopt a records
retention and backup policy, and buy a computer with appropriate software or software services.
Staff also recommends the Company contact Staffs auditors for further information on
Regulatory accounts classification.
Cash Flow and Accounts Receivable
Staff completed financial analyses of the Company's books, including a cash flow
analysis. The analysis shows the Company has liquidity problems and that its revenues do not
cover its expenses. In particular, the Company's Accounts Receivable Procedures have
deficiencies that hinder the Company's ability to ensure accounts receivable are current. The
Company follows standard procedures, such as filing liens and terminating water service, as part
of its collection procedures. But an analysis of accounts receivable from 2013-2015 revealed
high delinquency rates; the Company routinely carries accounts receivable that are more than 90
days overdue, and the average account is more than 50 days overdue. Having 95% of Accounts
Receivable current is closer to normal. The Company presently has no processes to reconcile
accounts receivable with deposits. Staff believes such a process is needed to improve internal
controls for accounts receivable.
REVENUE REQUIREMENT
The Company has requested a historical test year ending December 31, 2015, with pro
forma adjustments to revenues and costs. Staff has made adjustments and updated the Company's
test year data to reflect the results of their analysis. Attachment A shows a summary of the
adjustments Staff recommends in this case. The Staff-adjusted results show a net annual
operating loss of $25 ,932 and a Net Plant in Service of $459,505.
Revenues
The Company's Application stated that test year revenue was $52,219 from unmetered
revenue and $13 7 from other revenue. The other revenue consisted of $125 in disconnection fees
and $12 in returned check fees. The other revenues are all one-time revenues that Staff
STAFF COMMENTS 4 AUGUST 19, 2016
recommends be removed from the incremental revenue requirement calculation as shown on
Attachment A, Column B.
In addition, $6,310 of the test year revenue came from surcharge fees that the Company
collected, as described below. Staff recommends reclassifying that amount from unmetered
revenue into Commission-approved surcharges collected (Attachment A, Column C).
Surcharge
In Order No. 29104 (Case No. MNV-W-02-01), the Commission authorized the Company
to collect a five dollar per month surcharge from each customer to " ... fund a contingency reserve
account. The reserve account will assure the Company's ability to provide more reliable service
by providing a fund for extraordinary and unforeseen major repair and replacements." The
Commission required that:
1. The surcharge be separately identified on billing statements;
2. The surcharge be deposited in a separate contingency reserve bank account;
3. The Company submit a surcharge report with the Company's annual report providing a
detail of all surcharge funds collected and disbursed; and
4. The Company cease the surcharge when the contingency reserve account reached $10,000,
and that the Company may reactivate the surcharge when the reserve account falls below
$5,000.
In Order No. 30420 (Case No. MNV-W-06-01), the Commission noted that the Company
had failed to file the proper reports and maintain proper documentation, and had used some of the
funds for unauthorized expenses. The Commission ordered the Company to replace those funds
not spent on authorized expenditures and for the Company to adhere to the record keeping and
reporting requirements.
In reviewing the surcharge for this case, Staff notes the Company has satisfied
requirement 1 by properly identifying the surcharge separately from the tariff amounts for water
service on the customers' bills. But the Company has not satisfied requirements 2 and 3; the
Company has not regularly deposited funds into a separate contingency reserve surcharge
account, and the Company's annual report has not included a surcharge report. Staff also audited
the Company's surcharge deposits and expenditures and learned that an additional $63,460
through September 2016 should be deposited into the contingency reserve account. See
STAFF COMMENTS 5 AUGUST 19, 2016
Attachment B. The Company reported that the funds collected by the surcharge have been used
for day-to-day operations. Staffs findings support this statement. Specifically, Staff has verified
that the Company properly used $7,450 in surcharge funds for extraordinary and unforeseen
major repairs or replacements as contemplated in the prior Order. The rest has been used for day­
to-day operations of the Company without approval from the Commission. Since the customer­
supplied surcharge funds are only to be used to cover extraordinary and unforeseen major repairs
and not for day-to-day operating expenses, Staff recommends the Commission require the
Company to account for the remaining $62,443 as contributed capital, and use those funds to
reduce Plant in Service. See Attachment B, line 1 7.
Because the Company has not satisfied the Commission's requirements for using the
surcharge, Staff recommends that the surcharge be discontinued. Staff recommendations for plant
in service related to system improvements and accounting for surcharge funds will properly
reflect these items in base rates following this case.
Expenses
The Company reported Total Expenses from Operations, before interest, for the test year
totaling $100,838 as shown on Attachment A, Column A, line 33. This total consists of test year
actual expenses equaling $55,473, plus known and measureable expenses equaling $45,365.
Known and Measurable Changes
Adjusting test year data (embedded costs) to reflect known and measureable changes is a
standard regulatory accounting tool that is used to update a company's revenue requirement.
When a project or operating change occurs during the test year, twelve months of expenses for the
project or operating change do not appear in the accounts for that year. The purpose of a known
and measureable change is to properly reflect twelve months of expenses in the revenue
requirement for recovery in rates. Staff verified all known and measurable changes for
reasonableness. Any adjustments are discussed below.
Labor Expenses -Overview
Staff's Composition Analysis revealed employee compensation and the related payroll
taxes equal 66.3% of all reported expenses. All Company employees are family members or
STAFF COMMENTS 6 AUGUST 19, 2016
extended family members. Thus, their compensation is a related party transaction and subject to
additional tests of reasonableness. Staff used the Idaho Department of Labor Annual Idaho
Occupational Employment and Wage Release for 2015, for the Metropolitan Idaho Falls Area, for
comparisons. Staff used the Standard Occupational Code (SOC), Occupational Titles and pay
rates for each duty to test total compensation for each employee. The results of Staffs analysis
are summarized below.
Labor -Operations and Maintenance
The Company is required to have a licensed water system operator. However, the
Company has not separately reported expenses for these duties. The Company employs Mr.
Gneiting, who owns the Company and is a licensed water system operator. Mr. Gneiting, holds
License No. DWDVSWS 12020G, and is well acquainted with this water system. His oversight
meets legal requirements necessary for the Company to complete its primary operating objective:
to deliver clean, safe drinking water. In this case, the Company reported Mr. Gneiting's total
compensation under the category of "Salaries -Officers and Directors." While this classification
may be convenient, it does not reflect the reality of day-to-day operations. To test the
reasonableness of these wages, Staff used local wages for SOC Code 51-8031 , Water and Waste
Water Plant and System Operator. The average wage for someone in this classification with Mr.
Gneiting's experience is $18.16 per hour. Total reported wages for Mr. Gneiting, including
known and measureable changes is $12,240 in the test year. Using Mr. Gneiting's statements
about his duties and hours, and Staffs observations and other audit evidence about his
administrative duties, Staff reclassified 75.0% of his reported compensation to "Labor­
Operations and Maintenance." This is equivalent to 42 hours per month at $18.16 per hour. In
light of this reclassification, Staff believes it is reasonable to transfer $9,180 to "Labor­
Operations and Maintenance," as shown on Attachment C and summary Attachment A,
Column D.
Labor -Administrative and General
Administrative staffing at Morning View has changed since the previous audit. The
Company reported a total of $16,800, including known and measureable changes, as
compensation for Mr. Reading, a related party. Mr. Reading performs part time duties as a
STAFF COMMENTS 7 AUGUST 19, 2016
bookkeeper, SOC code 43-3031; SOC code 11-1021 , general manager; SOC code 43-3011 ,
Account Clerk; SOC code 43-3011 , Account Collector; and other duties. Staff believes the
quality of the Company's documentation does not satisfy the burden of proof for related parties.
See Boise Water Corp. v. !P UC, 97 Idaho 832555 P.2d 163 (1976) (The general rule places "upon
the utility the burden of proving reasonableness of its operating expenses paid to an affiliate ....
and if there is an absence of data and information fro m which the reasonableness and propriety of
the services rendered and the reasonable cost of rendering such services can be ascertained by the
commission, allowance is properly refused"). Here, Staff did not receive a schedule of annual
hours by duty so was not able to fully break out the wages by duty. Mr. Reading reported a total
of 1040 hours annually. Staff recognizes Mr. Reading may require and Morning View may
choose to pay more than local pay rates. However, it doesn't mean the total cost is prudent for
inclusion in customer rates. Staff believes the majority of Mr. Reading 's time is applied to
bookkeeping duties and total duties are approximately 500 hours annually under normal
operations. The median pay rate equals $15 .27 per hour. Staff recommends reducing Labor -
Administrative and General, by $9,165. This will also decrease payroll taxes by and additional
$1 ,402. See Attachment D and summary Attachment A, Column E.
Salaries -Officers and Directors
The Company is a corporation in good standing, and that salaries for a corporation's
Officers and Directors are normal operating expenses. Reported salaries and other compensation
for Company management totaled $12,240. Staff reclassified 75.0% of this amount as Labor ­
Operations and Maintenance. The remaining balance of $3,060 is the compensation for Mr.
Gneiting's management and administrative duties, including his approval of payments,
performance of various managerial duties, and oversight of Financial Statements. Most of Mr.
Gneiting's administrative duties are included in General Manager, SOC code 11-1021 , at $37.79
per hour. His other duties are similar to those typically performed by Office Clerks, such as SOC
code 43-9061 , at $13.37 per hour. Staff thus believes $3,060 reasonably compensates Mr.
Gneiting for performing his managerial and administrative duties.
STAFF COMMENTS 8 AUGUST 19, 2016
Purchased Power and Fuel Expense
Purchased power and fuel expenses are primarily related to the cost of electricity used for
water pumping. The Company reported test year actual expenses for purchased power and fuel
expense of $15,582, and known changes to those expenses of $6,000, for a total pro forma
adjusted expense of $21,582 (Attachment A, Column A, line 11). Staff recommends, however,
that the Company's reported proforma expense be reduced by $7,303 as shown in Attachment A,
Column F, resulting in a Staff-recommended expense of $14,279. The detailed calculation of the
Staff adjustment is shown in Attachment E. There are four steps in calculating Staffs reduction
of $7,303.
First, Staff calculated the effect of a $0.002903 per kWh increase in the variable cost of
electricity that the Company purchased from Rocky Mountain Power for water pumping. The
adjustment for the electricity cost increase is a positive $487 (Step 1 shown in Attachment E).
Second, Staff adjusted for abnormally high electricity usage in November 2015 and
December 2015. Electricity usage should be directly related to the quantity of water pumped and
sold to customers. The Company purchased 31,317 kWh from Rocky Mountain Power during
November 2015 and December 2015 , and sold 1,156,000 gallons of water during the two months
(27.1 kWh per 1,000 gallons pumped). In comparison, the Company purchased fewer kWh in
each of the previous six months, yet sold between 4,461 ,000 and 11,351,000 gallons of water.
Over the six month period from May 2015 through October 2015, the Company purchased
110,833 kWh and sold 46,671,000 gallons of water (2.4 kWh per 1,000 gallons pumped). The
electricity usage in November 2015 and December 2015 is abnormally high relative to usage in
the previous six months; over 10 times as many kWh per 1,000 gallons pumped as in the six
month period. Staff used the more typical November and December kWh for 2014 and calculated
an adjustment for abnormal kWh of negative $2,046 (Step 2 shown in Attachment E). The
Company should further investigate the cause of the high electricity use for November 2015 and
December 2015.
Third, Staff calculated an adjustment for unnecessary minimum charges and late charges
on the electric bills. The Company owns three pumps and receives three different electric bills
from Rocky Mountain Power. The new pump is billed under a Rocky Mountain Power service
plan that imposes a minimum charge if the total bill falls under a certain threshold. Because of
this provision, the Company should use the new pump until the minimum bill threshold is met.
STAFF COMMENTS 9 AUGUST 19, 2016
When the minimum threshold has not been met in a given month, splitting usage between two
pumps can cause minimum bill charges that could have otherwise been avoided. For example, in
May 2015 and September 2015, the Company split its use between two pumps, and incurred
minimum bill charges of $116.11 and $69 .12. These charges could have been avoided had the
new pump been used exclusively. Staff reduced purchased power and fuel expenses by the
$116.11 and $69.12 for May 2015 and September 2015, respectively.
Staff recognizes that the aforementioned reduction for abnormal usage in November 2015
and December 2015 will trigger minimum charges in these two months. Therefore, Staff has
adjusted purchased power and fuel expense up by $239.75 per month for November 2015 and
December 2015. The minimum charges for some months are unavoidable and Staff is not
recommending adjustments for these months.
Additionally, Staff recommends a reduction of $39 to account for unnecessary late fees on
electric bills. The net of adjustments to purchased power and fuel expense for minimum charges
and late fees is an increase or $255 (Step 3 shown in Attachment E).
Fourth, the Staff recommends rejection of the Company's proposed $6,000 adjustment for
known changes to purchased power and fuel expense (Step 4 shown in Attachment E). The
Company has not justified this adjustment. The net of the four steps in the calculation of the
adjustment is a reduction of $7,303.
Materials and Supplies -Operations and Maintenance
The Company reported $4,100 in expenses for Materials and Supplies -Operations and
Maintenance, including $3,062 for transactions during 2015. The known and measureable
increase totaled $1,037 for maintenance on the new well house. Among the transactions included
for 2015, are accounting adjustments, payments for incidental labor, a security contract and two
related-party transactions. The first related-party transaction included labor for placing a small
concrete pad at the new well house. Staff believes the costs of this addition, including $152 for
concrete and $450 for labor, are improvements and not a regularly recurring expense.
Consequently, Staff is removing this expense, totaling $602, and has capitalized it to plant in
service. The second related party transaction was a transfer of funds totaling $572.95 to Landco
on March 11, 2015. The Company claims this $572.95 was for three invoices incorrectly paid by
Landco. In related-party transactions, the related parties bear an increased burden of proof. It is
STAFF COMMENTS 10 AUGUST 19, 2016
not enough for the Company to simply show it incurred the related-party expense; rather, the
Company must provide evidence that the expense was reasonably incurred. In Production
Request No. 40, Staff requested documentation, including evidence that Landco paid the three
invoices totaling $572.95. The Company included a copy of an invoice for one of the three
invoices totaling $430. However, the Company could not document that Landco previously paid
the three amounts, or otherwise provide evidence to show that this related-party transaction was
appropriate. Staff has thus removed expenses totaling $1,175, as shown on Attachment F.
Materials and Supplies -Administrative and General
Morning View reported $1 ,600 in expenses for Materials and Supplies -Administrative
and General. This category of expenses consists of postage, office supplies and computer
expenses. During its audit, Staff tested expenses for postage and office supplies. The total also
included $300 for computer training. Although Staff believes computer training is unlikely to be
an annually recurring expense, no adjustment was made because it is reasonable that $300
annually for training in other areas will occur. In the future, however, the Company should book
training to the proper expense category.
Contracted Services -Water Testing
Water testing requirements follow a nine year rotation schedule. Staff believes it is
reasonable to include an annualized amount to allow collection of the total amount over the nine
year schedule. Calculation of the total testing costs and the annual adjustment is included in
Attachment G.
The Company's proforma water testing expense is $1,000. Staff calculated water testing
expenses for the Company's three wells to be $1,952. Therefore, Staff recommends an increase
of $952 to the Company's proforma water testing expense.
Miscellaneous Expenses
The Company's Application includes $12,049 in Miscellaneous Expenses. The Company
lists 12 categories of Miscellaneous Expenses, and adequately documented the amounts in several
of these categories. Consequently, Staff only discusses some specific categories.
STAFF COMMENTS 11 AUGUST 19, 2016
1. Miscellaneous Expense -Bank Charges: Morning View maintains an account with
Wells Fargo Bank. The Company reported a $360 Bank Service Charge Expense consisting of
three types of charges. The first charge is for returned customer checks. Wells Fargo Bank
charged $12.00 for each item returned. Staff recognizes this charge occurs for specific customer
accounts and believes it is reasonable to recover these charges directly from those customers as
discussed below in non-recurring charges. Second, Wells Fargo Bank charged $18.00, for on-line
access to account statement balances and activities. Staff believes use was not excessive and no
adjustment is required. Third, the largest amount of Bank Charges is for service charges totaling
$281. Wells Fargo Bank applied a charge which increases with the number of transactions, as
explained in the monthly bank statement. Staff does not believe it is appropriate to ask water
company customers to pay these charges when they are not assessed by other banking institutions.
Staffs audit adjustment removed Bank Service Fees totaling $281, as shown on Attachment H,
line 1.
2. Miscellaneous Expense -Software Support: The Company reported total software
support of $3,000. The Company purchases the meter reading software each year totaling $1,500
annually. Additional software is available for printing invoices at a cost of $1,500. During this
audit, Staff observed the meter reading software in use. In Production Request No. 44, Staff
requested a demonstration of the software's ability to print monthly invoices, using specified
information. In the response, the Company reported it printed sample water bills using Excel
software. The additional bill printing software is not being used. Staffs audit adjustment thus
removes $1,500, as shown in Attachment H, line 6.
3. Miscellaneous Expense -Legal Fees: The Company requested in Addendum #2 an
additional $700 for legal fees to defend their water rights. Staff agrees that defending the
Company's waters rights is prudent, and therefore recommends including the $700 as additional
legal fees in Miscellaneous Expense. See Attachment H, line 8.
4. Miscellaneous Expense -Mileage: Morning View proposed a total of $2,368 in known
and measureable mileage expenses. The purpose is to reimburse employees use of personal
vehicles for Company business. Transportation to and from work is not a reimbursable expense.
The standard Federal mileage rate is $0.54 per mile. The proposed $2,368 is equivalent to 4,385
miles annually, or an average of 365 miles monthly. A branch of the Company's bank is located
1.2 miles from the office. If this trip were made five times each month, to make deposits, the
STAFF COMMENTS 12 AUGUST 19, 2016
annual total equals 144 miles, or $77.76, annually. Staff recognizes additional mileage may be
appropriate for delivering water samples or other uses. Documentation provided by the Company
did not include mileage records for 2015 or the calculation method. Although the $2,368 does not
satisfy the known and measureable requirements, some mileage is reasonable. Staff recommends
removing $2,000 as shown in Attachment H, line 9.
5. Miscellaneous Expenses -Rent: The Company included $900 ofrent expenses in
miscellaneous expenses. The office is rented from Mr. Gneiting and is a related-party transaction.
Rent for this office was included in the 2002 case, and in the previous audit for MNV-W-06-01
where Rental Expense of $950 annually was approved by the Commission. In this audit, Staff
considered suitability, location and physical condition. Staff toured the building and found it
contained three offices, a bathroom plus typical office equipment and furniture. The building has
a parking area and is near the well houses. Staff acknowledges the building is aged and the
exterior is rough but found the building serviceable. Staff believes the location is significant
because small office rentals are not common nearby. Staff believes the Company's adjustment of
$900 is reasonable as shown on Attachment H, line 10.
6. Miscellaneous Expense -Repairs and Maintenance: Staff acknowledges combining
these two categories is a common practice. However, for regulatory purposes, Maintenance
Expenses and Repair Expenses are different categories of expenses. In Production Request
No. 46, Staff requested copies ofrecent repair records. The Company's response referred to the
maintenance expenses previously reported. Staff notes four items. First, with two exceptions, the
amounts referred to were included in operating expenses as Supplies-Operating and Maintenance.
Second, adding them again as repairs expense would compound misclassification and double
counting. Third, labor costs for Mr. Gneiting, whose duties include repairs, are already included
in expenses. Fourth, it is hard to demonstrate that adding new Plant in Service directly caused a
need for additional repairs. The differences between Maintenance and Repairs are explained in
the uniform system of accounts for small water companies. "Maintenance" is regular or
predictable and usually includes labor and materials and perhaps minor supplies. In contrast,
"repairs" are generally unpredictable in timing. Labor is performed by employees whose wages
are reported in other accounts resulting in repairs usually being smaller amounts. Consequently,
maintenance expenses may be known and measureable while repairs expenses may not be. Staff
often uses average amounts demonstrated in recent historical records for repairs expenses. In the
STAFF COMMENTS 13 AUGUST 19, 2016
absence of repair records, Staff believes $150 is the appropriate annual amount to include in
miscellaneous expenses. The balance of $850 is removed, as shown in Attachment H, line 11.
7. Miscellaneous Expenses -Rate Case Transcript: Morning View intends to purchase a
copy of the Public Hearing Transcript to make sure customer concerns are properly addressed.
Staff believes this is an appropriate adjustment and has increased expenses by $188 as shown on
Attachment H, line 13.
Regulatory Fees -PUC
Morning View reported test year actual PUC fees of $630, plus known and measureable
changes of $127, for a total PUC-related expenses of $757. This is an increase of 117.5% over
the prior year. Staff's reconciliation revealed the $630 includes $506 for property taxes. Staff's
adjustment thus reclassifies the $506 as property tax expense. Property taxes are properly shown
on Attachment A, Column A, line 30. Staff calculated the annual PUC fee using 2015 revenues at
$130 as shown on Attachment I. The adjustment nets to $384 is also shown on Attachment A,
Column J.
RATE BASE
Plant in Service
The Company lost most if not all of its accounting records in 2013. When rebuilding
those accounting records, the Company assigned values to Structures and Improvements, Power
Pumping Equipment, Hydrants, and Office Furniture and Equipment. While Staff commends the
attempt to rebuild its accounting records, Staff recommends adjusting plant numbers to those
established by the Commission.
In the Company's last rate case, Case No. MNV-W-06-01, the Company was authorized a
plant in service amount of $8,994. This consisted of: (1) the prior plant in service that would be
fully depreciated in 2007; (2) an electrical panel for $1,269 with a five-year depreciable life; (3) a
new computer for $806 with a five-year depreciable life; and (4) DEQ-required repair work on the
well pump totaling $5,014 with a ten-year depreciable life. The first three items are fully
depreciated and, for purposes of convenience in regulatory accounting, they can be eliminated
from the plant in service schedule along with the applicable accumulated depreciation. The fourth
item would have a remaining undepreciated amount of $255. Again for ease ofreporting, Staff
STAFF COMMENTS 14 AUGUST 19, 2016
recommends that this be used as an offset to the contingency fund contribution and therefore
remove it as a separate line item along with all the applicable accumulated depreciation. The
remaining balance of the contingency fund contribution will be $62,188 as shown on Attachment
B, line 19.
The only remaining plant in service items totaling $532,104 were placed in service in
2015 and were mostly funded with the Idaho Drinking Water Revolving Loan. The detailed Plant
in Service Accounts are shown in Attachment J. As discussed above in the Surcharge section,
Staff recommends reducing plant in service by the remaining amounts contributed in the
contingency fund. Staff allocated the total $62,188 contribution funds to the various accounts
based on the percentage of the total. The remaining Plant in Service amount is $469,916. See
Attachment J.
Using the NARUC Depreciation Practices for Small Water Utilities guidelines, Staff
recommends the depreciation schedule as reflected in Attachment K for a total depreciation
expense of $20,822. All of these plant items were placed in service in 2015. Using a half-year
convention for the first-year depreciation, Staff recommends an accumulated depreciation amount
of $10,411 , for a net plant in service of$459,505 .
Working Capital
In the Company's Application, the Company requested $71 ,388 in working capital equal
to the operating expenses referenced in the Application. This is not, however, a proper method
for calculating working capital. Staff recommends using the 118th rule for calculating working
capital. This method calculates the working capital to be included in rate base at 118th of a
company's operating expenses. This is a common practice for small water utilities without the
capability of performing a more complex analysis. With this calculation, Staff recommends a
working capital of $6,369.
The Staff recommended rate base is the total of net plant in service and working capital
totaling $465,874. See Attachment L.
Rate of Return and Capital Structure
In its Application, the Company reported that it has $550,654 in long-term debt at 8%
interest. The only long-term debt outstanding is the Idaho Drinking Water Revolving Loan,
STAFF COMMENTS 15 AUGUST 19, 2016
which has a current outstanding balance of $531,502 at 1.25% interest. There are provisions for
partial forgiveness of this loan. Nevertheless, Staff recommends that the Company continue to
treat the entire outstanding loan amount as long-term debt until the loan is actually forgiven.
The Company also reported that it has $19,152 in short-term debt, which consists of loans
to the Company from its owners, Mr. and Mrs. Gneiting. Idaho Code §61, Chapter 9, requires
loans to be approved by the Commission. These loans will not likely be paid back with the 12
months required to be considered short term loans, and the payback time frame is too flexible to
be considered loans in most circumstances. Therefore, Staff recommends treating these loans
from owners as investments that constitute part of their equity in the Company. Staff thus
recommends a capital structure consisting of 90.77% long-term debt and 9.23% common equity,
as shown on Attachment M.
Staff also recommends an 11 % return on common equity (ROE) in this case, which
reflects current market conditions. The resulting overall rate of return is 2.15%.
The Company has expressed concern about covering its debt payments. Staff estimated
these payments will cost the Company about $22,000 per year. The Staff recommended return on
investment plus depreciation is $30,837. This will cover the payments on the loan. Part of the
reason the current revenue requirement exceeds the expected payment is that the Company's plant
is depreciated over an average of 28-year life, while the loan is for 30 years. Therefore, Staff
recommends that the Company create its own sinking fund to be prepared to meet this timing
difference for the final two years of this loan may not be covered by return and depreciation in the
revenue requirement at that time.
Calculation of Revenue Requirement
Staff recommends a total rate base of $465,874 as stated in Attachment L. This is
$213,766 less than the Company's Application. Staffs recommended rate base consists of net
plant in service of $459,505 and working capital amount of $6,369.
Attachment N shows the Staff recommended revenue requirement increase. Staff
calculated the revenues associated with the return on rate base (line 3) to be $10,017 ($465,874 x
2.15%). This amount is subject to federal income taxes, state income taxes, and the Commission
fees. See Idaho Code§ 61-1001 et. seq. (each public utility must pay to the Commission an
annual regulatory fee). The Staff-calculated deficiency of $25 ,932 is also subject to Commission
STAFF COMMENTS 16 AUGUST 19, 2016
fees. The process of increasing the revenue requirement for taxes and Commission fees is
referred to as the "gross-up." The gross-up factor is 128.8884% when the amount is subject to
income taxes, and 100.6925% when it is not subject to income taxes. The process of calculating
the gross-up is detailed on Attachment N, lines 19 to 26. These grossed-up amounts result in a
total deficiency of $38,843 (line 13) for a total revenue requirement of $91,061 (line 18), which is
$77,029 less than the Company's request. Based on these calculations, Staff recommends that the
Company's revenue requirement be increased by 74%.
RATE DESIGN
Staff believes the Company's current rate design causes low water users within each
customer group (based on lot size) to inappropriately subsidize high water users . Staff thus
proposes a new rate structure to better mirror the Company's cost to provide water service. To
achieve this more equitable rate structure, Staff recommends that the Company implement a
volumetric (usage) charge. Staff proposes a two-part rate structure that includes minimum
charges and a two-tier volumetric charge. The Company's current and proposed rate design and
Staffs more equitable rate design are explained below.
The Company's current minimum charge varies by lot size with separate minimum
charges for quarter acre, half acre, and one acre lots. The Company's existing and proposed rates
are illustrated in the following table:
Lot Size Current Minimum Company Proposed
Charge (per month) Minimum Charge
Y-1 Acre $27.4 I + 5.00 surcharge $48.61
Yi Acre $35.94 + 5.00 surcharge $81.88
I Acre $44.48 + 5.00 surcharge $98.96
In this case, the Company has proposed a flat rate structure with minimum charges only;
however, the Company has asked Staff to help it design a two-part structure with a minimum
charge and a volumetric charge. The Company installed meters over a year ago in anticipation
that it would implement volumetric charges.
STAFF COMMENTS 17 AUGUST 19, 2016
The proposed volumetric charges recognize that some variable (i.e., "volumetric") costs to
provide water service vary directly with the quantity of water consumed. For example, the
Company's costs for electricity to pump water accounts for about 20% of the Company's
operating expenses during the test year. As the amount of water pumped increases, the
Company's costs for electricity to pump that water also increases. The volumetric charge helps
ensure customers who add variable costs contribute equitably to covering those costs, thus
minimizing the subsidization of high-use customers by low-use customers.
Staffs proposed rate structure is illustrated below:
Lot Size Proposed Size of I st Tier (in I st Tier charge 2nd Tier charge
Minimum Charge 1,000 gallons) ($/1,000 gallons) ($/1 ,000 gallons)
Y. Acre $49.00 10 $0.15 $0.45
Y:, Acre $58.00 40 $0.15 $0.45
I Acre $63.00 45 $0.15 $0.45
In summary, Staffs proposed volumetric charges follow an inclining block (tier) structure.
In an "inclining block," the price per gallon of water increases as usage increases. Staffs
proposal includes two usage tiers. The lower-priced first tier would cover water use for basic
"indoor" needs, like cooking, dishwashing, clothes washing, bathing and personal hygiene. The
higher-priced second tier would cover more "discretionary" water use. Water for lawn
maintenance and gardening in warmer months could fall under the second, higher-priced tier.
Customers with quarter acre lots may buy up to 10,000 gallons per month at the lower first tier
price. Customers with half-acre and one acre lots pay higher monthly minimum charges, and may
buy larger amounts of water (40,000 and 45,000 gallons per month, respectively) at the first tier
price. Tier sizes were chosen so each customer group would buy about 39% of its water (based
on historical use) within the lower-priced first tier. The inclining block rate structure would
enable customers to mitigate some of the rate increase by conserving water. Low-use customers
may be able to purchase most or all of their water in the lower-priced tier, especially during non­
summer months. The higher second tier price would incentivize customers to use less water for
"discretionary" tasks. Since excessive water use can adversely affect downstream water pressure,
reducing consumption through the higher-priced second tier may help the Company avoid future
pressure problems.
STAFF COMMENTS 18 AUGUST 19, 2016
Additionally, two customers filed comments supporting an allowance, meaning some
water (e.g., 10,000 gallons per month) is provided at no charge when the monthly minimum
charge is paid. Staff opposes using an allowance in the minimum charge for Morning View
Water. Allowances incorrectly send the price signal that some water can be provided at no cost.
Furthermore, some customers are subsidized by those who keep monthly usage below the
allowance. For example, one customer commented that "in the winter we never go over 2,000
gallons, but we still pay the full amount." An allowance would cause this low-use customer to
subsidize higher-use customers in these winter months. The inclining block structure addresses
the desire to offer a reduced price for basic needs without sending the faulty price signal
associated with the allowance.
In Staffs proposal, minimum charges remain differentiated by lot size. Statistical
analyses performed by Staff confirm that quarter acre, half acre, and one acre customers have
distinctly different levels of water use. Differences in water use -especially during peak demand
periods -necessitate different levels of demand-related investment (e.g., water pumping capacity)
to serve the customer groups. Differentiating the minimum charges by lot size reflects these
differences in demand-related costs.
Staffs proposes minimum charges of $49.00 for quarter-acre lots, $58.00 for half-acre
lots, and $63.00 for one-acre lots. These minimum charges preserve the minimum charge
differentiation based on lot size, maintains similar average bill impacts among the three customer
groups (about a 72% increase), and allows for 20% volumetric cost recovery.
Bill Impacts
A range of possible monthly bill impacts from Staffs proposal are detailed in the
Attachments 0, P, and Q. Under Staffs proposed rates, customers who use more water pay
higher bills that reflect the additional variable costs that these customers create. Also, an increase
in usage results in a higher percentage bill increase. These attachments show that most monthly
bills based on past consumption fall into categories with lower percentage monthly bill increases.
Customers with the largest percentage bill increases would have ample opportunities to
reduce their bills. For example, two customers each used over 400,000 gallons of water in July
2015. These two customers used more than four times the water that an average customer used in
this month.
STAFF COMMENTS 19 AUGUST 19, 2016
Staff's proposed rates would generate revenues approximating the revenue requirement
target of $91,061. Staff's proof-of-revenue analysis is included as Attachment R. Staff cannot be
certain about how usage will change under Staff's volumetric rate design proposal.
Consequently, Staff recommends the Company include water sales, by rate group and customer
with its annual report. If significant changes in sales affect system operation and cash flow, the
Company may not be able to collect its revenue requirement. The requested usage report would
help Staff monitor the Company's financial condition, and should help determine if a rate
adjustment is necessary.
Customer Notice and Press Release
The Company contacted Commission Staff on May 3, 2016, to ask for assistance in
drafting the customer notice and press release for this case. Staff worked with the Company to
ensure these documents adhered to the Commission's Rules of Procedure, IDAPA 31.01.01. The
Company filed its customer notice with the Commission on May 19, 2016, along with a request to
amend its Application. The Company mailed the notice to customers on May 25, 2016. The
Company also emailed a copy of its customer notice to the list of local media contacts provided
by Commission Staff, which included the Jefferson Star in Rigby, the Idaho Falls Post Register
and Channel 8 News.
Public Workshop
The Commission issued a Notice of Public Workshop on June 7, 2016. At Staff's request,
the Company attached the Commission's Notice of Public Workshop to customer bills that were
sent to customers on June 25 , 2016. The workshop occurred in Rigby on July 12, 2016, and was
attended by more than 50 people.
Discussion at the workshop focused on water pressure issues, lack of communication
between the Company and its customers, and the Company's proposed rates. In response to a
customer's concern about ongoing pressure issues, the Company tested water pressure at several
locations near the customer's house. The Company found the pressure to be between 58 psi and
60 psi, which is well above the minimum DEQ requirement of 40 psi. The Company also stated
that the pressure at the pump (well house) was 70 psi.
STAFF COMMENTS 20 AUGUST 19, 2016
When some customers stated they had not received advance notice of the workshop, Staff
confirmed with the Company that it had mailed the workshop notice to all customers. Staff notes
that besides the Company mailing the notice of the July 12 workshop with its June 25 bills, the
Commission also issued a press release about the workshop on June 17, 2016. Staff is, therefore,
satisfied that customers received sufficient notice of the workshop.
Notice of Public Hearing
The Company mailed the Commission's Notice of Public Hearing with its July 25 bills,
and Staff mailed the Notice of Public Hearing to customers on August 5, 2016. In addition, on
August 10, 2016, the Commission received a letter from the Concerned Citizens of Morning View
Water Company Homeowners Association (CCMV) stating that CCMV had distributed the
Notice of Public Hearing to all customers on Saturday, August 6, 2016. Staff is confident that
customers have received sufficient notice of the hearing.
Customer Comments
As of August 18, 2016, twenty (20) comments had been submitted. Some customers
submitted multiple comments. All commenters opposed the amount of the rate increase. One
customer noted that many customers live below the poverty level and qualify for government
assistance, and customers with fixed-incomes or limited income expressed concern about the
large rate increase proposed by the Company.
Most customers understand the importance of metered usage. Many of them support a
rate design based on metered usage, but think that some usage should be covered by the monthly
customer charge. Customers stated that the proposed increase and metered service would
adversely affect their ability to maintain lawns, gardens, and pastures. Another customer stated
that she has already reduced outside watering to the point that her plants are dying. Other
customers suggested that they might have to reduce future usage and allow landscaping and lawns
to dry up in order to keep summer water bills affordable.
Customers have expressed concern about when the Company began reading meters and
whether the Company properly recorded the water usage history that Commission Staff used to
design rates. At Staffs request, the Company included each customer's monthly usage record for
the past year in the customer's July 25 bill. Customers who have previously submitted comments
STAFF COMMENTS 21 AUGUST 19, 2016
on the case have contacted Staff to request that if a metered rate design is approved, the
Company's future bills should identify meter reads and when meter readings are taken.
Long-time customers commented that the outages of previous years are no longer a
problem and that it is no longer necessary to install pressure pumps on their properties to ensure
sufficient water pressure. However, they are concerned that low water pressure could again
become a problem as more of the empty lots within the system are developed and new houses are
built.
Customer Complaints and Inquiries to Commission
In 2013, the Commission's Consumer Assistance Staff received one complaint and one
inquiry about the Company. The complaint expressed concern about the lack of water pressure
during the summer due to high usage.
There were three complaints and three inquiries in 2014. One complaint concerned water
pressure and water quality issues. The other two complaints focused on the Company's billing
statements and billed amounts. One customer inquired about the prospect of a rate increase due to
system improvements. The other two customers asked about the Commission's requirements
regarding the Company's business hours and when service may be disconnected.
In 2015, three complaints and one inquiry were filed. One complaint focused on billing
and payments and the Company 's inability to provide a detailed billing history. Another
customer needed help to obtain a payment plan that would fit her budget. One complaint asked
about the surcharge, water pressure issues and the system being shut down without advance notice
to customers; the customer also raised the issue of his water being shut off without sufficient
advance notice. A customer inquired about the Company requiring the customer to install a check
valve on their side of the meter, which is a requirement of the State plumbing code under certain
circumstances.
Two complaints were filed in 2016 after the public workshop occurred. The first
complaint was from a customer who wanted a billing and payment history for his account. The
second complaint concerned the water usage history supplied to customers and ongoing
fluctuations in water pressure.
STAFF COMMENTS 22 AUGUST 19, 2016
Historically, most complaints have focused on water quality, low water pressure and
service disruptions. Others focus on billing and payment issues, including payment arrangements
so the customer can continue to receive service.
Staff recommends that the Company maintain open communications with customers,
including appropriately notifying them if the system needs to be shut down for maintenance or
repairs and promptly responding to customer questions and concerns. The Company has an office
in the subdivision and should set regular office hours that enable customers to speak directly with
the Company. The Company should also ensure it responds promptly to customer phone calls
and emails, and that it has a 24-hour telephone number that customers can call in case of an
emergency. The Company should be sure to follow DEQ guidelines for notifying customers
before system shutdowns, and provide its water quality summary to ensure customers are aware
of the Company's current water quality.
Meter Reading and Billing
If the Commission approves a new rate design based in part on metered usage, the
Company will need to establish a meter-reading and billing policy that will comply with the
Utility Customer Relations Rules (UCRR).
The UCRR require the Company to read meters on a regular schedule and to based bills
on those readings. In addition, bills must include the beginning and ending meter readings and
the date the readings were taken. The Company mails billing statements on the 25th of each
month for service provided during that calendar month. With the adoption of a metered usage
rate design, the Company may need to change billing issuance and due dates. Staff will work
with the Company to ensure that its meter reading and billing practices and new billing statement
will meet UCRR requirements.
After the Company sent customers their metered usage history, some customers contacted
Commission Staff to express concern about whether the billed usage is based on actual readings.
Staff explained how the meters record usage and customers can verify meter readings. Staff
recommends that the Company work with Staff to establish a meter reading and billing policy and
develop a written explanation of that policy for distribution to customers.
STAFF COMMENTS 23 AUGUST 19, 2016
WATER CONSERVATION
Adjusting to metered rates may be difficult for the Company's customers because they are
used to paying a fixed charge for an unlimited amount of water. To help customers keep their
water bills affordable, the Company should educate its customers about how they can conserve
water inside and outside their homes. Staff is willing to work with the Company to identify
existing resources and/or develop appropriate information that can be provided to customers to
help them during the transition.
COMPANY TARIFF
The Company's current tariff, including its Rate Schedules and the General Rules and
Regulations for Small Water Utilities, was last updated in 2007 in Case No. MNV-W-06-01.
Staff recommends that the Company update its tariff to satisfy the UCRR's current requirements,
and to incorporate the Uniform Main Extension Rule for Water Utilities based on Order No. 7830
(Case No. U-1500-22). Staff is willing to work directly with the Company to ensure its tariff
complies with the Commission's rules and regulations.
NON-RECURRING CHARGES
Reconnection Fee
In its review of Company records, Staff found three instances in which the Company
charged customers a reconnection fee when service was disconnected and again when service was
reconnected. The reconnection fee only applies when service is reconnected. There is no
approved charge for disconnecting service. The Company agreed to credit those accounts for the
overcharge. Staff recommends that the Company revise the description of the reconnection fee in
its tariff to clearly describe the circumstances under which the fee applies. Staff also recommends
that the Company work to ensure it uniformly applies the rates and charges approved by the
Commission.
Late Payment Charge
Late payment charges encourage timely payment and help the Company recoup some of
the cost of collecting past due bills. The UCRR allows a minimum of fifteen days after the bill
date before a payment becomes past due. Staff supports the adoption of a late-payment charge to
STAFF COMMENTS 24 AUGUST 19, 2016
encourage prompt bill payment, and recommends that the Company be allowed to charge 1 % on
any past-due balance owing at the time of the next billing statement.
Insufficient Funds Charge
The Company has not asked for permission to charge a customer whose check is not
honored by the customer's financial institution or who makes an electronic payment on an
account with insufficient funds. However, Staff recognizes such a charge is appropriate to allow
the Company to recover its cost and discourage customers from making payments that are not
honored by their financial institution. Idaho Code §28-22-105 allows a company to charge up to
$20.00 for dishonored checks, and the Commission has allowed utility tariffs to include this type
of charge in the past.
In its audit for this case, Staff found the Company has incurred costs for dishonored
payments. The Company's bank (Wells Fargo) assesses a $12.00 charge for each deposit the
Company makes that is returned unpaid by the customer's financial institution. In addition, there
are administrative costs associated with adjusting the customer's account records and pursuing
collection of the amount owed. Staff recommends that the Commission approve a $20.00
insufficient funds charge to be applied when a customer tenders payment for utility service with a
dishonored check or makes an electronic payment on an account with insufficient funds.
STAFF RECOMMENDATIONS
Staff recommends:
1. A 2015 test year with known and measurable changes.
2. The Company institute a records retention policy.
3. Stopping the surcharge.
4. A rate base of $465,874
5. An 11 % return on equity.
6. An overall rate of return of 2.15%.
7. An annual revenue requirement of $91,061 (a 74% increase).
8. A metered rate design as proposed by Staff.
9. The Company include monthly usage by customer number with its annual report.
STAFF COMMENTS 25 AUGUST 19, 2016
10. The Company work with Staff to revise its tariff, including rate schedules and General
Rules and Regulations.
11. A late payment fee of 1 % on the past due balance owing at the time of the next billing
statement.
12. A $20.00 insufficient funds charge to be applied when a customer tenders payment for
utility service with a dishonored check or makes an electronic payment on an account
with insufficient funds.
13. The Company revise its tariff to clearly explain the circumstances under which the
reconnection fee applies.
14. The Company update its tariff to comply with current UCCR requirements and
incorporate the Uniform Main Extension Rule for Water Utilities.
15. The Company work with Staff to establish a meter reading and billing policy and
develop a written explanation of that policy for distribution to customers.
16. The Company promptly return phone and email messages, and maintain a 24-hour
phone number for emergencies that is clearly posted on the door of the office.
17. The Company work with Staff to identify existing resources and/or develop
appropriate information that can be provided to customers to help them during the
transition to metered rates.
Respectfully submitted this
Technical Staff: Joe Terry
Bentley Erdwurm
Chris Hecht
John Nobbs
i :umisc:comments/mnvw 16.1 kkjtjnbecwh comments
STAFF COMMENTS
q ·-r!:, day of August 2016.
Karl Klein
Deputy Attorney General
26 AUGUST 19, 2016
Morning View Water Co.
Adjustments Summary
MNV-W-16-01
Company
Case Staff
A B C D E F G H I J K Recommendation
Transfer Labor-Materials &
Remove One Contingency Reclassify Admin & Electricity Supplies-Op& Water Plant
Time Revenue Surcharge Salaries Gen Expense Mtnce Testing Misc Expenses PUC Fees Adjustment
Revenues
1 Unmetered Sales 52,219 (6,310) 45,909
2 Commission-approved Surcharges collected 6,310 6,310
3 Other Revenue 137 (137)
4 Total Revenue 52,356 (137) 52,219
Operating Expenses
S Labor-Operation & Maintenance 9,180 9,180
6 Labor-Customer Accounts
7 Labor-Administrative & General 16,800 (9,165) 7,635
8 Salaries-Officers & Directors 12,240 (9,180) 3,060
9 Employee Pensions & Benefits
10 Purchased Water
11 Purchased Power & Fuel for Power 21,582 (7,303) 14,279
12 Chemicals
13 Materials & Supplies-Operation & Maintenance 4,100 (1,175) 2,925
14 Materials & Supplies-Adm in & General 1,600 1,600
15 Contract Services-Professional 1,890 1,890
16 Contract Services-Water Testing 1,000 952 1,952
17 Contract Services-Other
18 Rentals-Property & Equipment
19 Transportation Expense
20 Insurance 126 126
21 Advertising
22 Rate Case Expense (Amortization)
23 Regulatory Comm. Exp. (Other Except Taxes)
24 Bad Debt Expense
25 Miscellaneous Expenses 12,049 (3,743) 8,306
26 Total Operating Expense 71,388 (9,165) (7,303) (1,175) 952 (3.743) 50,952
27 Depreciation Expense 22,057 (1,235) 20,822
28 Rate Case Amortization
29 Regulatory Fees 758 (122) 636
30 Property Taxes 510 506 1,016
31 Payroll Taxes 5,596 (1,402) 4,194
32 DEQ Fees 530 530
33 Total Expenses 100,838 (10,567) (7,303) (1,175) 952 (3.743) 384 (1,235) 78,150
o C/) n > 34 Net Income (48,483) (137) 7,303 1,175 (952) 3.743 (384) 1,235 (25,932) ~ s-i,., ;::;: ~ ::::i ~ ~ 35 Plant in Service 630,322 602 (161,008) 469,916 -----nz::r-~ 0 0 3 36 Accumulated Depreciation 22,057 (11,646) 10.411 3 . 0 37 Net Plant in Service 608,265 602 (149,362) 459,505 3 2;?.
0 > ;?. < "' ' f -°' b
Morning View Water Co.
Contingency Fund Analysis
MNV-W-16-01
for CYE 2006
Deposits Anticipated
1 Jan 0
2 Feb 0
3 Mar 0
4 Apr 0
5 May 0
6 Jun 470
7 Jul 470
8 Aug 485
9 Sep 485
10 Oct 490
11 Nov 500
12 Dec 480
13 Totals $3,380
14 Total Deposits Expected
2007
480
470
475
470
465
465
490
485
485
495
500
500
$5,780
15 Balance per Order No 30420
16 Less: Verified Expenses
17 Net Amount
2008 2009
500 530
505 535
510 530
500 520
500 530
530 515
520 510
520 500
515 500
510 510
520 510
525 520
$6,155 $6,210
18 Less: Remaining Plant in Service From 2006 Case
2010
515
505
485
500
505
515
510
510
510
510
510
500
$6,075
19 Remaining Contingency Funds to be Applied to Rate Base
OC/l(J >­~pj ~ ~ ::o ~~~ ---n z ::r ;; 0 0 3 3 . (1)
3 s: a
(1) z c:o a< "' ' ~
°' ' 0
2011
505
505
505
520
515
505
505
510
505
500
500
495
$6,070
2012
505
505
sos
505
sos
510
510
510
505
500
500
510
$6,070
$ 63,460
$ 6,433
$ 7,450
$ 62,443
$ 255
$ 62,188
2013
530
530
530
530
530
530
530
530
530
530
530
530
$6,360
2014 2015 2016
530 525 520
530 525 525
530 530 525
530 530 525
530 530 520
530 530 520
530 530 520
530 530 520
530 520 520
530 520 0
530 520 0
525 520 0
$6,355 $6,310 $4,695
Morning View Water Corporation
Labor -Operations & Maintenance
CYE 2015
Reported
Water & Water Water System Opr
soc 51-8031
Audit Adjustment
Account Balance
Labor Labor
O&M Off & Dir
$0 $12,240
$9,180 ($9,180)
$9,180 $3,060
Attachment C
Case No. MNV-W-16-01
Staff Comments
08/19/16
Morning View Water Corporation
Labor -Adminstrative and General
David Reading
CYE 2015
Reported
Average Annual Wage
Staff
difference
Payroll Tax Expense
Adjustment for D. Reading
Payroll Adjustment
Payroll Tax Rate
Payroll Tax Adjustment
Hours
1,040
500
540
Details
($9,165)
15.30%
Rate
$16.15
$15.27
$0.88
Amount
($1,402)
Total
$16,800
$7,635
$9,165
Attachment D
Case No. MNV-W-16-01
Staff Comments
08/19/16
Morning View Water Company
Adjustment for Purchased Power/Fuel --Electricity Costs
Step 1: Adjusting for Rocky Mountain Power Price Increase
kWh kWh
Acct Acct kWh
66836835 1614436 Total
Jan-15 741 2,970 3,711
Feb-15 444 2,681 3,125
Mar-15 381 3,245 3,626
Apr-15 14,810 486 15,296
May-15 7,082 6,230 13,312
Jun-15 17,260 358 17,618
Jul-15 23,315 437 23,752
Aug-15 16,266 3,460 19,726
Sep-15 8,958 14,364 23,322
Oct-15 870 12,233 13,103
Nov-15 5,371 7,287 12,658
Dec-15 18,200 459 18,659
113,698 54,210 167,908
I Net Adjustment for Step 1
Step 2: Adjusting kWh for Abnormal Usage Pattern
Actual Sales Data
Monthly
Sales kWh/
{1,000 gal) kWh 1,000 Gallons
Jan-15
Feb-15
Mar-15
Apr-15
May-15 6,991 13,312 1.904
Jun-15 7,542 17,618 2.336
Jul-15 11,351 23,752 2.093
Aug-15 10,979 19,726 1.797
Sep-15 5,347 23,322 4.362
Oct-15 4,461 13,103 2.937
Nov-15 600 12,658 21.097
Dec-15 556 18,659 33.559
Total May-Dec 47,827 142,150
Jan-16
kWh price
change
($/kWh)
$ 0.002903
$ 0.002903
$ 0.002903
$ 0.002903
$ 0.002903
$ 0.002903
$ 0.002903
$ 0.002903
$ 0.002903
$ 0.002903
$ 0.002903
$ 0.002903
Adjustment
$ 10.77
$ 9.07
$ 10.53
$ 44.40
$ 38.64
$ 51.15
$ 68.95
$ 57.26
$ 67.70
$ 38.04
$ 36.75
$ 54.17
$ 487.44
$ 487.441
Attachment E
Case No. MNV-W-16-01
S'faff Comments
08/19/16 Page I of4
Morning View Water Company
Adjustment for Purchased Power/Fuel --Electricity Costs
Step 2 (Cont.)
Estimating KWh Assuming Typical November/December Pumping
Estimate 1
Based on maximum monthly kWh per lOK gallons sold {4.362)
{Over May-Oct 2015)
Monthly
Sales
Month {10,000 gal)
Nov-15 600
Dec-15 556
Estimate 1
Estimate 2
Based on Actual 2014 kWh
Month kWh
Nov-14 3,748
Dec-14 2,932 ------Estimate 2 6,680
Summary
Actual Nov/Dec 2015
Estimate 1 Nov/Dec
Estimate 2 Nov/Dec
kWh/
1000 Gallons
4.362
4.362
kWh
31,317
5,042
6,680
Estimated
kWh
2,617
2,425
5,042
Attachment E
Case No. MNV-W-16-01
Staff Comments
08/19/16 Page 2 of4
Morning View Water Company
Adjustment for Purchased Power/Fuel --Electricity Costs
Step 2 (Cont)
Calculating Adjustment to Account for Non-Typical Nov/Dec kWh
Use Estimate 2 Above
kWh
Actual Nov/Dec 2015 31,317
Less Estimate 2 6,680 ------Difference in kWh 24,637
S Value of kWh
kWh Difference
times Price per kWh
Downward Adjustment S
24,637
0.08306
2,046.35
Net Adjustment for Step 2 $ (2,046.35)
Step 3: Adjusting for Minimum Charges and Late Charges
Minimum Charges
Month Adjustment to Min Charges
May-15 S (116.11) (downward adj -remove unnecessary charge)
Sep-15 S (69.12) (downward adj -remove unnecessary charge)
Nov-15 S 239.75 (upward adj -add back minimum charge)
Dec-15 S 239.75 (upward adj -add back minimum charge) ------Adjustment S 294.27 Net Positive adjustment to Expenses (see note)
Note 1: Company incurred Unavoidable Minimum Charges
in Jan, Feb, Mar, and Oct 2015
Note 2: With lower usage levels used for the adjustment, Company would have
incurred late charges in Nov and Dec 2015; they are added back at $239.75.
Equals Mar 2016 late charge.
Summary of Step 3:
Minimum Charge Adjustment
Adj to Remove Late Charges
Net Adjustment for Step 3
s
s
294.27
(38.85)
$ 255.42
Attachment E
Case No. MNV-W-16-01
Staff Comments
08/19/16 Page 3 of 4
Morning View Water Company
Adjustment for Purchased Power/Fuel --Electricity Costs
Step 4: Remove Company's Proposed Known Adjustment
The Company's prosed known adjustment to purchased power/fuel
is not justified.
Net Adjustment for Step 4
Total Adjustment for Electricity Costs
Summary
Net Adjustment for Step 1
Net Adjustment for Step 2
Net Adjustment for Step 3
Net Adjustment for Step 4
Total Adjustment
Test Year Actual Purchased Power -Fuel for Power
(application Sch B, row 7)
Company Proposed Adjustment
Company Request (Pro Forma)
Staff Proposed Adjustment :
Staff Adjusted Purchased Power
$ (6,000.00)
$ 487.44
$ (2,046.35)
$ 255.42
$ {6,000.00)
$ {7,303.49)
$ 15,582.31
$ 6,000.00
$ 21,582.31
$ (7,303.49)
$ 14,278.82
Attachment E
Case No. MNV-W-16-01
Staff Comments
08/19/16 Page 4 of 4
Morning View Water Company
Materials & Supplies -Operations & Maintenance
CYE 2015
Check No. Details Total
Non Recurring
Knife River Concrete
Labor -Frank Gneiting
Undocumented Related Party
Audit Adjustment
3329
3331
BankTrnsf
$152
$450
$573
$1,175
Attachment F
Case No. MNV-W-16-01
Staff Comments
08/19/16
Morning View Water Company
Adjustment for Water Testing
Wells #1-3
Source Analyte
Each Well Nitrate
Each Well Nitrite
Each Well Alpha
Each Well Radium 226
Each Well Radium 228
Each Well Uranium
Each Well Arsenic
Each Well Sodium
Each Well Flouride
Each Well IOC **
Each Well VOC**
Each Well Chlorinated Herbicides
Each Well soc 525
Subtotal Per Well
Distribution
Source Analyte
Distribution Lead & Copper
Distribution Total Coliform
Subtotal Distribution
Frequency
Annual
1 in 9 Years
1 in 6 Years
1 in 9 Years
1 in 9 Years
1 in 6 Years
1 in 3 Years
1 in 3 Years
1 in 3 Years
1 in 3 Years
1 in 3 Years
1 in 3 Years
1 in 3 Years
Frequency
5 samples/3 years
Monthly
!Grand Total -Normalized Annual Water Testing Costs
* Total number of tests in 9-year cycle.
** IOC = Inorganic Contaminants
voe = Volatile Organic Contaminants
DBP = Distribution By-Products
Company Pro Forma Water Testing
Staff Normalized Annual Water Testing Costs
Staff Adjustment to Water Testing
No. of Test*
9
1
1.5
1
1
1.5
3
3
3
3
3
3
3
No. of Test*
30
108
Cost/Test Total Cost Annual Cost
$ 40.00 $ 360.00 $ 40.00
$ 40.00 $ 40.00 $ 4.44
$ 110.00 $ 165.00 $ 18.33
$ 180.00 $ 180.00 $ 20.00
$ 180.00 $ 180.00 $ 20.00
$ 150.00 $ 225.00 $ 25.00
$ 40.00 $ 120.00 $ 13.33
$ 30.00 $ 90.00 $ 10.00
$ 25.00 $ 75.00 $ 8.33
$ 200.00 $ 600.00 $ 66.67
$ 210.00 $ 630.00 $ 70.00
$ 250.00 $ 750.00 $ 83.33
$ 280.00 $ 840.00 $ 93.33
$ 472.78
Subtotal Per Well $ 472.78 ------t Times 3 Wells $ 1,418.33
Cost/Test
$ 70.00
$ 25.00
Total Cost Annual Cost
$ 2,100.00 $ 233.33
$ 2,700.00 $
$
$
$
$
300.00
533.33
1,951.67 !
1,000.00
1,951 .67
951.67
Attachment G
Case No. MNV-W-16-01
Staff Comments
08/19/16
Morning View Water Company
Miscellaneous Expense
CYE 2015
Reported Test Yr Kwn&Meas
1 Bank Svc Charges $351 $9
2 Idaho Rural Water Assn $200 $0
3 Licensing $146 $155
4 Missing Funds $324 ($324)
5 Telephone & Internet Svs $2,632 $68
6 Computer software support $0 $3,000
7 Quickbooks $0 $760
8 Legal Fees $0 $100
9 Mileage $0 $2,368
10 Office Rent $0 $900
11 Repairs & Maintenance $0 $1,000
12 Utilities $0 $360
13 Rate Case Transcript $0 $0
13 subtotal $3,653 $8,396
Total Audit Adj
$360 ($281)
$200
$301
$0
$2,700
$3,000 (1,500)
$760
$100 700
$2,368 ($2,000)
$900
$1,000 ($850)
$360
$0 $188
$12,049 ($3,743)
Adj total
$79
$200
$301
$0
$2,700
$1,500
$760
$800
$368
$900
$150
$360
$188
$8,306
Attachment H
Case No. MNV-W-16-01
Staff Comments
08/19/16
Morning View Water Company
PUC Fees Expense
CYE 2015
Reported
Test Year Actual
Known & Measureable Changes
Total
Fee Calculation
2015 Revenues
Rate
Annual PUC Fee
Reclassification of Property taxes
Audit Adjustment
Detail subtotal
$630.40
$127.11
$757.51
$52,356
0.2481%
$129.90
$506.00
Amount
$121.61
Attachment I
Case No. MNV-W-16-01
Staff Comments
08/19/16
Morning View Water Co.
Plant in Service
MNV-W-16-01
ACCT# DESCRIPTION
301 Organization
302 Franchises and Consents
303 Land & Land Rights
304 Structures and Improvements
305 Collecting & Impounding Reservoirs
306 Lake, River & Other Intakes
307 Wells
308 Infiltration Galleries & Tunnels
309 Supply Mains
310 Power Generation Equipment
311 Power Pumping Equipment
320 Purification Systems
330 Distribution Reservoirs & Standpipes
331 Trans. & Distrib. Mains & Accessories
333 Services
334 Meters and Meter Installations
335 Hydrants
336 Backflow Prevention Devices
339 Other Plant & Misc. Equipment
340 Office Furniture and Equipment
341 Transportation Equipment
342 Stores Equipment
343 Tools, Shop and Garage Equipment
344 Laboratory Equipment
345 Power Operated Equipment
346 Communications Equipment
347 Miscellaneous Equipment
348 Other Tangible Property
TOTAL
New Plant
Installed in Allocate Unused
2015 Contingency Funds
55,867 (6,529)
87,696 (10,249)
96,478 (11,276)
62,688 (7,327)
149,119 (17,428)
72,891 (8,519)
7,365 (861)
532,104 (62,188)
Staff Position
for Plant in
Service
49,338
77,447
85,202
55,362
131,691
64,372
6,504
469,916
Attachment J
Case No. MNV-W-16-0 1
Staff Comments
08/19/16
Morning View Water Co.
Accumulated Depreciation and Depreciation Expense
MNV-W-16-01
ACCT# DESCRIPTION
301 Organization
302 Franchises and Consents
303 Land & Land Rights
304 Structures and Improvements 49,338
305 Collecting & Impounding Reservoirs
306 Lake, River & Other Intakes
307 Wells 77,447
308 Infiltration Galleries & Tunnels
309 Supply Mains 85,202
310 Power Generation Equipment 55,362
311 Power Pumping Equipment 131,691
320 Purification Systems
330 Distribution Reservoirs & Standpipes
331 Trans. & Distrib. Mains & Accessories
333 Services
334 Meters and Meter Installations 64,372
335 Hydrants
336 Backflow Prevention Devices
339 Other Plant & Misc. Equipment
340 Office Furniture and Equipment
341 Transportation Equipment
342 Stores Equipment
343 Tools, Shop and Garage Equipment
344 Laboratory Equipment
345 Power Operated Equipment
346 Communications Equipment
347 Miscellaneous Equipment 6,504
348 Other Tangible Property
TOTAL 469,916
Useful Life Dep Rate
35 2.86%
25 4.00%
50 2.00%
10 10.00%
20 5.00%
35 2.86%
10 10.00%
First Year Dep/
Accumulated Depreciation
705
1,549
852
2,768
3,292
920
325
10,411
Depreciation
Expense
1,410
3,098
1,704
5,536
6,585
1,839
650
20,822
Attachment K
Case No. MNV-W-16-01
Staff Comments
08/19/16
Morning View Water Co.
Rate Base Calculation
MNV-W-16-01
1 Plant In Service
2 Accumulated Depreciation
3 Net Plant in Service
4 Inventory
5 Working Capital
6 Tota l Rate Base
7
8
9 Working Capital Calculation
10 Total Operating Expense
11 Working Capital
Application
630,322
22,057
608,265
71,388
679,653
71,388
71,388
Staff
Recommendation
469,916
10,411
459,505
6,369
465,874
50,952
6,369
Difference
(160,406)
(11,646)
(148,760)
(65,019)
(213,778)
(20,435)
(65,019)
Attachment L
Case No. MNV-W-1 6-0 1
Staff Comments
08/19/16
Morning View Water Co.
Rate of Return Calculation
Case No. MNV-W-16-01
0 C/J O > '2'.: s I>) :=I: ~~~~
--0 Z ::,-0: 0 0 3 3 . (1)
3 ~ ;cl. a < 3:
V, ' f
0\
b
1 Common Equity (Proprietor Capital Paid In)
2 Retained Earnings
3 Total Common Equity (Proprietor Capital) Line 1 + Line 2
4 Short-Term Debt
5 Long-Term Debt
6 Total Capital
7 Weighted Cost of Capital (Rate of Return Required)
(A)
Amount
Outstanding
$ 34,911
$
$ 34,911
$ 19,152
$ 550,654
Company Case
(8) (C)
% of Total Cost
Outstanding of
(Column A/ Capital
Total Line 6)
5.77% 0.00%
3.17% 4.00%
91 .06% 8.00%
Staff Recommendation
(D) (A) (8) (C) (D)
Weighted Amount % of Total Cost Weighted
Cost Outstanding Outstanding of Cost
(Column BX (Column A/ Capital (Column BX
Column C) Total Line 6) Column C)
$ 54,063
$
0.00% $ 54,063 9.23% 11 .00% 1.02%
0.13% 0.00% 4.00% 0.00%
7.28% $ 531,502 90.77% 1.25% 1.13%
Morning View Water Co.
Revenue Requirement
Case No. MNV-W-16-01
Company Case
1 Rate Base $ 682,070
2 Required Rate of Return 7.41%
3 Return on Investment $ 50,551
4 Net Operating Income Realized $ (50,901)
5 Net Operating Income Deficiency $ 101,452
Revenue Requirement Increase
9 Subject to Income Tax $ 50,551
10 Tax Gross Up Factor 128.0631%
Tax Grossed Up Amount $ 64,738
11 Not Subject to Income Tax $ 50,901
12 Gross Up Factor not Subject to Income Taxes 100.1881%
Not Subject to Income Taxes Amount $ 50,996
Revenue Requirement Increase $ 115,734
13 Revenue Increase Required $115,734
14 Amortize Rate Case Expenses
15 Total Revenue Increase Required $115,734
16 Total Revenue Collected in Test year $52,356
17 Revenue Increase % 221.05%
18 Total Gross Revenue Requirement $168,090
Subject to Excluding
Gross-up Factor Calculation Income Taxes Income Taxes
19 Net Deficiency 100.00% 100.00%
20 PUC Fees 0.1877% 0.1877%
21 Bad Debts 0.0000% 0.0000%
99.8123% 99.8123%
22 State Tax @ 8% 7.9601% 0.0000%
23 Federal Taxable 91.8522% 99.8123%
24 Federal Tax @ 15% 13.76570% 0.00000%
25 Net After Tax 78.08650% 99.81230%
26 Net to Gross Multiplier 128.06311% 100.18805%
Staff Case
$
$
$
$
$ 10,017
128.8884%
$ 12,911
$ 25,932
100.6925%
$ 26,112
$
$
$
$
Subject to Income
Taxes
100.00%
0.1877%
0.5000%
99.3123%
7.9601%
91.3522%
13.76570%
77.58650%
128.88840%
465,874
2.15%
10,017
(25,932)
35,949
38,843
$38,843
38,843
52,219
74.39%
91,061
Excluding Income
Taxes
100.00%
0.1877%
0.5000%
99.3123%
0.0000%
99.3123%
0.00000%
99.31230%
100.69246%
Attachment N
Case No. MNV-W-16-01
Staff Comments
08/19/16
Morning View Water
Quarter Acre Lot Bill Comparison
Staff
Tgal / month Percentile Current Proposed
0 $32.41 $49.00
5 20 $32.41 $49.75
10 49 $32.41 $SO.SO
20 69 $32.41 $55.00
30 80 $32.41 $59.50
40 87 $32.41 $64.00
so 93 $32.41 $68.50
75 97 $32.41 $79.75
100 98 $32.41 $91.00
144 max $32.41 $110.80
Current Rate (includes $5.00/ month surcharge)
Minimum
Charge
One Quarter Acre $ 32.41
Staff Proposed
One
Quarter
Acre
Minimum
Charge $ 49.00
Tier 1 -$/1000 gal $0.15
Size 1st Tier (1000 g) 10
Tier 2 -$/1000 gal $0.45
$ Increase
$16.59
$17.34
$18.09
$22.59
$27.09
$31.59
$36.09
$47.34
$58.59
$78.39
% Increase
51%
54%
56%
70%
84%
97%
111%
146%
181%
242%
Attachment 0
Case No. MNV-W-16-01
Staff Comments
08/19/16
Morning View Water
Half Acre Lot Bill Comparison
Staff
Tgal / month Percentile Current Proposed
0 $40.94 $58.00
5 30 $40.94 $58.75
10 43 $40.94 $59.50
20 54 $40.94 $61.00
38 67 $40.94 $63.70
40 68 $40.94 $64.00
so 72 $40.94 $68.50
100 89 $40 .94 $91.00
200 98 $40.94 $136.00
432 max $40.94 $240.40
Current Rate (includes $5.00/ month surcharge)
Minimum
Charge
One Half Acre $ 40.94
Staff Proposed
One Half
Acre
Minimum
Charge $ 58 .00
Tier 1 -$/1000 gal $0.15
Size 1st Tier {1000 g) 40
Tier 2 -$/1000 gal $0.45
$ Increase
$17 .06
$17 .81
$18 .56
$20 .06
$22.76
$23.06
$27.56
$50.06
$95.06
$199.46
% Increase
42%
44%
45%
49%
56%
56%
67%
122%
232%
487%
Attachment P
Case No. MNV-W-16-01
Staff Comments
08/19/16
Morning View Water
Acre Lot Bill Comparison
Tgal Percentile
0
5 20
10 43
20 47
40 51
66 59
100 74
150 86
200 93
458 max
Staff
Current Proposed
$49.48 $63.00
$49.48 $63.75
$49.48 $64.50
$49.48 $66.00
$49.48 $69.00
$49.48 $79.20
$49.48 $94.50
$49.48 $117.00
$49.48 $139.50
$49.48 $255.60
Current Rate (includes $5.00/ month surcharge)
Minimum
Charge
Acre $ 49.48
Staff Proposed
Minimum
Charge
Tier 1 -$/1000 gal
Size 1st Tier (1000 g)
Tier 2 -$/1000 gal
Increase
$13 .52
$14.27
$15.02
$16.52
$19 .52
$29.72
$45.02
$67.52
$90.02
$206.12
Acre
$63.00
$0.15
45
$0.45
% Increase
27%
29%
30%
33%
39%
60%
91%
136%
182%
417%
Attachment Q
Case No. MNV-W-16-01
Staff Comments
08/1 9/1 6
Morning View Water
Proof of Revenue
Quarter Acre lot Customers
Current Rate
Including ($5.00
Units Surcharge)
Customers 22 $32.41
Minimum Charges1 264
1st Tier Usage 2,056
2nd Tier Usage 3,103
Total Usage 5,159
Revenue -Quarter Acre
Half Acre lot Customers
Current Rate
Including ($5.00
Units Surcharge)
Customers 53
Minimum Charges' 636 $ 40.94
1st Tier Usage 9,290
2nd Tier Usage 14,660
Total Usage 23,950
Revenue -Half Acre
Acre lot Customers
Current Rate
Including ($5.00
Units Surcharge)
Customers 31
Minimum Charges1 372 $ 49.48
1st Tier Usage 9,647
2nd Tier Usage 15,081
Revenue -Acre
Total
Units
Customers 106
Minimum Charges' 1272
1st Tier Usage 20,993
2nd Tier Usage 32,844
Total Usage 53,837
Revenue -Acre
Current Staff Proposed Revenue under
Revenue Rate Staff Proposed $ Increase % Increase
$8,556.24 $49.00 $12,936.00 $4,379.76 51%
$0.00 $0.15 $30840 $308.40 N/A
$0.00 $0.45 $1,396.35 $1,396.35 N/A
$0.00 $1,704.75 $1,704.75 N/A
$8,556.24 $14,640.75 $6,084.51 71%
Current Staff Proposed Revenue under
Revenue Rate Staff Proposed $ Increase % Increase
$26,037.84 $58.00 $36,888.00 $10,850.16 42%
$0.15 $1,393.50 $1,393.50 N/A
$0.45 $6,597.00 $6,597.00 N/A
$0.00 $7,990.50 $7,990.50 N/A
$26,037.84 $44,878.50 $18,840.66 72%
Current Staff Proposed Revenue under
Revenue Rate Staff Proposed $ Increase % Increase
$18,406 56 $63.00 $23,436.00 $5,029.44 27%
$0.15 $1,447.05 $1,447.05 N/A
$0.45 $6,786.45 $6,786.45 N/A
$18,406.56 $31,669.50 $13,262.94 72%
Current Revenue under
Revenue Staff Proposed $ Increase % Increase
$53,000.64 $73,260.00 $20,259.36 38%
$3,148.95 $3,148.95 N/A
$14,779.80 $14,779.80 N/A
$0.00 $17,928.75 $17,928.75 N/A
Note: volumetric charges of $18,257 account for approx. 20% of revenue of $88,973
$53,000.64 $91,188.75 $38,188.11 72%
Attachment R
Case No. MNV-W-16-01
Staff Comments
08/19/16
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 19TH DAY OF AUGUST 2016,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. MNV-W-16-01 , BY MAILING A COPY THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:
NOLAN GNEITING OWNER
MORNING VIEW WATER CO
PO BOX 598
RIGBY ID 83442
E-MAIL: momingviewater(u),gmail.com
SECRE'£~~
CERTIFICATE OF SERVICE